updated 10:30 am EDT, Tue July 15, 2008

MS Attacks Google Yahoo

Microsoft today argued that US House and Senate Judiciary Committees that the proposed Google/Yahoo deal, claiming that Yahoo's agreement to support ads through a non-exclusive deal is anti-competitive and would allegedly hurt innovation. The legal counsel for Microsoft, Brad Smith, expresses fears that Google would control as much as 90 percent of online advertising, allowing it to dictate prices and force companies to advertise through it for proper exposure. He also warns that Google could potentially have a monopoly on Internet services.

"If search is the gateway to the Internet, and most believe that it is, this deal will put Google in a position to own that gateway and the information that flows through it," Smith claims.

He likewise assumes that Google would increase its rates and that the up to $800 million of income Yahoo hopes to generate from its deal would come only at the expense of companies hoping to advertise rather than competitors in online ads.

The specter of Google as an all-seeing Internet monitor is also raised as he warns that Google would allegedly have a view of nearly all online Internet activities and effectively put its own "national Internet policy" in place, according to Smith. He doesn't explain how a deal that is limited to ads and instant messaging integration would create this effect.

Google and Yahoo in the past said they have worked to create a deal they believe wouldn't run afoul of US antitrust laws. The current agreement would allow other advertisers, including Microsoft, to join in the program.

Microsoft's complaint is timed just weeks before a crucial August 1st shareholders meeting at Yahoo that will likely decide the fate of the search engine firm, with investor Carl Icahn receiving Microsoft support in his attempt to oust Yahoo's directors in a vote and make it easier for Microsoft to buy either Yahoo's search business or the entire company.

You know, M$ did it to themselves. During the browser wars they use their position to kill Netscape as a competitor, then totally stopped any development of IE allowing the rise of Mozilla, and others. It's like they pushed everyone out and then just turned their backs. The bizarre thing is that M$ has said that they where always looking for that thing that might displace them from the top. I think what this really shows is how M$ really has never been in tune with the end users. It's not that M$ is a bad company, it's that they have no true creativity - something of a misquote from SJ while he was still on the outs.

Is Apple M$ now? Is Google? I don't think so, I don't think either is trying to dominate the whole computer industry and they work on trying to stay in the lead by innovating. Though I'm sure some might point to iTunes/iPod, the other counter to that is that iPod works with Amazon and other MP3. Google to has examples, but lets recall if there are any dominate positions of either company they didn't start that way on their respective hills, ie iPod started with AAC before digital music was really more than anything but a novelty, in fact it was apple that push the digital format as standard and in a sense created what we have today. M$ on the other hand took it's dominant position and used it to squash well established competitors ie Word Perfect and Netscape. They even strong armed Intel (reference is the Wired article done in the early 2Ks).